BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

Applications of

AMERICAN AIRLINES, INC.

DELTA AIR LINES, INC.

HAWAIIAN AIRLINES, INC.

in the matter of 2010 U.S.-Haneda 

Combination Services Allocation Proceeding

Docket DOT-OST-2010-0018

REPLY OF AMERICAN AIRLINES, INC.

TO OBJECTIONS TO ORDER 2015-3-17

Howard Kass 

Vice President – Regulatory Affairs

Robert A. Wirick

Managing Director, Regulatory and 

International Affairs

Abigail Donovan

Director, Congressional and Federal Affairs

American Airlines, Inc.

1101 17th Street, N.W.

Washington, DC 20036

(202) 326-5153

howard.kass@aa.com

robert.wirick@aa.com

abigail.donovan@aa.com

Jonathan Hacker

Burden H. Walker

O’Melveny & Myers, LLP

1625 Eye Street, N.W.

Washington, DC 20006

(202) 383-5300

jhacker@omm.com

bwalker@omm.com

April 13, 2015
BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

Applications of

AMERICAN AIRLINES, INC.

DELTA AIR LINES, INC.

HAWAIIAN AIRLINES, INC.

in the matter of 2010 U.S.-Haneda 

Combination Services Allocation Proceeding

Docket DOT-OST-2010-0018

 April 13, 2015

REPLY OF AMERICAN AIRLINES, INC.

 TO OBJECTIONS TO ORDER 2015-3-17 

In the course of this proceeding, Delta Air Lines, Inc. (“Delta”) promised to provide 

“daily year round” service between Seattle and Tokyo’s Haneda airport, should the Department 

of Transportation (“Department” or “DOT”) agree to permit Delta to retain slot authority for that 

service. Order 2015-3-17 (the “Order”) simply gives Delta the chance to fulfill that promise. 

Delta’s objections are makeweight, as its proposed alternative, which would permit Delta to 

provide service as infrequently as every other week, a distant cry from the daily service that 

Delta promised, the Department requires, and American Airlines, Inc. (“American”) will 

provide, if and when Delta violates its service obligation. American thus submits that the 

Department should reject the objections filed by Delta, as well as those filed by Hawaiian 

Airlines, Inc. (“Hawaiian”) and make final its tentative decision set forth in the Order. American 

also supports the Department’s award of backup authority to American. 
2

AMERICAN’S REPLY TO DELTA’S OBJECTIONS

I. The Proposed Conditions Merely Hold Delta to the Promise It Made to the 

Department. 

DOT’s proposed Order gives Delta exactly what it asked for—continued ability to use a 

slot pair for daily year-round Seattle-Haneda service. Delta now objects to what it calls an 

“extreme condition”1imposed on its slot authority, but the Order merely reflects the promise 

Delta made in the course of this very proceeding—to operate the Seattle-Haneda route on a 

“daily year-round” basis.

2

 Delta can hardly now protest a condition that Delta itself proposed.

Delta’s promise of “daily year-round” service between Seattle and Haneda was no 

rhetorical flourish—Delta made the promise for the specific purpose of retaining its SeattleHaneda slot pair. Before the Department instituted this proceeding, Delta was willing to promise 

only that it would offer “daily service” between Seattle and Haneda for a limited period, i.e., 

from March 29 “through the [2015] summer season.”3 After the Department decided to take a 

fresh look at the allocation of the Haneda slot pair, a chastened Delta shifted course, and has ever 

since proclaimed to DOT its unwavering commitment to provide “daily year-round” service 

should it be allowed to retain the Haneda-Seattle slot pair.4

 

1 Objections of Delta to Order 2015-3-17, April 6, 2015, Docket DOT-OST-2010-0018, 

p. 1.

2 Response of Delta to Evidence Request, January 5, 2015, Docket DOT-OST-2010-

0018, p. 2. 

3 Consolidated Answer of Delta Air Lines, Inc., October 17, 2014, Docket DOT-OST2010-0018, p. 5, n.2. 

4 Response of Delta to Evidence Request, January 5, 2015, Docket DOT-OST-2010-

0018, p. 2. 
3

It was entirely reasonable for the Department to take Delta at its word. Indeed, the Order 

expressly relies upon Delta’s “daily year-round” service pledge in allowing Delta to retain its slot 

pair authority:

The principal question before the Department therefore is whether, 

despite Delta’s past conduct, we can now rely on Delta to deliver 

the public interest benefits for the Seattle-Haneda route that were 

central to the Department’s previous decision and remain just as 

critical to the present tentative decision. The Department would 

not tentatively be selecting Delta here if the Department did not 

have a justifiable basis to believe that Delta could be relied upon to 

provide the service it now promises.

The Department has tentatively decided that, based on Delta’s 

statements and the evidence submitted in this proceeding, 

combined with other protective measures the Department is 

adopting and will discuss below, the Department has a sufficient 

basis to permit Delta to retain the Seattle-Haneda route. 

Importantly, Delta has expressly committed to resume a full 

pattern of daily service beginning on March 29, 2015, and to 

continue that daily service not only through the Summer season but 

also through the following Winter season.

5

There is nothing arbitrary and capricious in the Department’s reliance on Delta’s own 

commitment to provide service both “daily” and “year-round,” as opposed to service broken 

intermittently for as many as 15 days at Delta’s discretion. 

II. The Proposed Conditions Are Also Consistent with DOT Authority And Narrowly 

Tailored to Best Service the Public Interest. 

The Department has the duty and the authority to allocate and, when necessary, reallocate 

slot pairs “to ensure that they are used effectively and in a manner that promotes competition and 

 

5 Order to Show Cause, March 27, 2015, Docket DOT-OST-2010-0018, p. 7-8 (footnote 

omitted) (emphasis added).
4

otherwise best serves the public interest.”6 The conditions proposed by the Department reflect a 

careful balance among (1) fulfilling its obligation to maximize public benefits; (2) ensuring that 

Delta abides by its service commitment pledge for daily year-round service; and (3) recognizing 

the need for a procedure that would allow Delta legitimate relief from the service commitment 

pledge for legitimate non-commercial cancellations as the need arose.

Delta’s objections rest on a serious mischaracterization of the proposed conditions. Delta

describes the proposed Order as imposing an “unyielding 365-day-a-year mandate”7that creates 

a public safety risk by omitting any exception for flight cancellations related to safety, weather, 

or other unforeseeable non-commercial reasons. But the Order does no such thing. To the 

contrary, the “waiver” provisions described in Order 2015-3-17 permit Delta all necessary 

latitude to cancel flights for legitimate non-commercial reasons, whether those reasons are 

known in advance or occur at the last minute. First, in advance of an anticipated discontinuation 

of service, the Order expressly grants Delta the ability to request a waiver of the proposed 

conditions,8and the Order gives the Director of the Office of International Aviation the “power 

to grant or deny any [Delta] request for waivers.”9 Second, “when emergency circumstances 

outside of Delta’s control make it impossible” to meet its commitment to daily year-round 

service, the Order makes clear that seeking DOT permission to suspend services is not even 

required.10 Nothing on the face of the Order, or in the history of DOT oversight of U.S. carrier 

 

6 Order 2014-12-9, December 9, 2014, Docket DOT-OST-2010-0018, p. 5 (citing Order 

95-2-30, Feb. 14, 1995, Docket 49760, p.5; Order 94-12-7, Dec. 6., 1994, Docket 49760, p. 8;)

7 Objections of Delta, p. 5.

8 Order to Show Cause, March 27, 2015, Docket DOT-OST-2010-0018, p. 9.

9

Id., p. 8, n.27. 

10 Id., p. 9.
5

performance under authority conferred by DOT, suggests that legitimate non-commercial 

cancellations would be rejected. 

The Department is certainly entitled to impose a condition in general terms like 

“emergency circumstances outside of Delta’s control,” rather than attempt to predict and specify 

in advance exactly which circumstances will justify a non-waiver cancellation. See Cement Kiln 

Recycling Coalition v. EPA, 493 F.3d 207, 218 (D.C. Cir. 2007) (“[W]hen Congress has not 

specified the level of specificity expected of the agency, the agency is entitled to broad deference 

in picking the suitable level.” (internal quotation marks and alterations omitted)). Indeed, any 

such effort would be contrary both to the public interest and Delta’s own interest. Delta thus has 

no basis for objecting to the general condition now—a proper objection would arise only if the 

Department were to administer the condition in an arbitrary and capricious manner by, for 

example, revoking Delta’s slot authority after a cancellation genuinely made for emergency 

reasons beyond Delta’s control. See Sprint Corp. v. FCC, 331 F.3d 952, 956 (D.C. Cir. 2003) 

(“[W]here agency retains substantial discretion to implement its decision, the decision is not ripe 

for judicial review until it has been implemented in particular circumstances.” (emphasis

added)). Nobody, of course, expects the Department to administer the condition unreasonably. 

III. Delta’s Attempt to Narrow the Scope of This Proceeding Is Contrary to the Clear 

Intent of the Department Set Forth in the Instituting Order.

Delta’s Objections mischaracterize the scope of this proceeding. Delta suggests that 

when DOT initiated the proceeding, it somehow conclusively restricted its options to “targeted 

conditions” solely addressed to “Delta’s cutback in service during the past winter season.”11

 

11 Objections of Delta, p. 2.
6

While Delta’s abandonment of the Seattle-Haneda route this past winter may have been 

the catalyst for instituting proceedings, the Department stated from the outset that the proceeding 

would do more than simply address Delta’s 2014-2015 winter season actions. As the Instituting 

Order states, the “public interest requires a fresh examination of ... the best use of the SeattleHaneda opportunity,” including “whether the public interest would be better served by 

reallocating the slot pair for service from another U.S. city by another U.S. carrier.”12 “The 

principal objective in this proceeding,” DOT emphasized, “will be to maximize public benefits 

with this scarce resource.”13 The proceeding was never limited to merely addressing Delta’s 

winter cutbacks. 

IV. Delta’s Novel “Alternative” Condition Is Patently Unacceptable.

While objecting to the exercise of authority to impose any conditions on Delta’s SeattleHaneda authority beyond the 90-day dormancy rule, Delta nonetheless proposes an alternative 

condition: authority could be revoked only upon “15 consecutive days of nonuse.”14

Delta’s proposal, raised for the first time in its Objections, is not a true safeguard but a 

thinly-veiled attempt to return to the status quo ante. Under its purported “alternative,” Delta 

could meet the conditions, and retain its Seattle-Haneda slot pair authority, by operating only a 

single flight every 15 days. That translates to a requirement of about 25 annual Seattle-Haneda 

flights, which is actually fewer than the 34-flight-per-year pace on which Delta was proceeding 

 

12 Order 2014-12-9, Docket DOT-OST-2010-0018, p. 5 (footnotes omitted).

13 Id. 

14 Objections of Delta, p. 4
7

before DOT initiated this proceeding.15 Such a proposal certainly does not fulfill Delta’s “daily 

year-round” service commitment, nor does it do anything to satisfy DOT’s initial concern that 

Delta’s prior performance was not serving the public benefit. For these reasons, Delta’s 

proposed alternative is not remotely “reasonable,” as Delta asserts.16 

V. DOT is Under No Obligation to Treat Delta and American the Same. 

Delta also argues that the Order “imposes substantially differential burdens on Delta . . . 

and American” because the daily year-round service requirement has only been imposed on 

Delta, as the primary slot authority holder, and not on American, as the backup.17 But the APA 

requires only that agencies treat “similar situations” similarly, County of Los Angeles v. Shalala, 

192 F.3d 1005, 1022 (D.C. Cir. 1999), and American and Delta are not similarly situated parties, 

see, e.g., Muwekma Ohlone Tribe v. Salazar, 708 F.3d 209, 216 (D.C. Cir. 2013) (where parties 

“not similarly situated,” APA claim of arbitrarily differential treatment fails). To the contrary, 

the Department has every reason to treat them differently. First, the daily year-round service 

requirement was crafted specifically in response to Delta’s historic failure to use its SeattleHaneda slot pair authority adequately. As only the backup, American has not yet been given the 

opportunity to make good on its promise to provide daily year-round service to Haneda. Should 

American become the primary slot authority holder and establish a service record similar to 

 

15 See Application of American Airlines, Inc., January 5, 2015, Docket DOT-OST-2010-

0018, p. 9 (noting that Delta had only operated or scheduled 17 Seattle-Haneda flights in a sixmonth period). 

16 Objections of Delta, p. 4. Even if Delta’s proposed alternative were reasonable—that 

is, even if it were timely raised, adequately supported by evidence, and consistent with the public 

interest—the agency would not be required to adopt it just because Delta proffered it. The APA 

does not impose a “narrow tailoring” requirement—so long as a given agency action is consistent 

with the public interest and is not arbitrary and capricious, the agency is not required to adopt a 

proffered alternative merely because that approach, too, would be reasonable. 

17 Id. at 6.
8

Delta’s disuse, American would expect the imposition of conditions similar to those imposed on 

Delta. Further, the record evidence shows that when American could not effectively use the 

Haneda authority it was awarded, it voluntarily returned the slot pair to DOT. Delta has done 

the opposite. Delta and American are not situated identically at all, and thus need not be treated 

identically with respect to slot authority conditions. 

VI. Delta’s Resurrection of the “Security of Route” Principle Is to No Avail.

Finally, Delta tries to resurrect a more than half-century old Civil Aeronautics Board 

(“CAB”) case to suggest that the Department’s Order 2015-3-17 violates a “security of route” 

principle. See CAB v. Delta Air Lines, Inc., 367 U.S. 316 (1961). The holding of CAB v. Delta, 

however, was that given the carrier’s investment interest in its route, a certificate cannot be 

altered without formal notice and hearing. Congress did want to assure carriers that their 

“investment in operations would be protected insofar as reasonably possible” the Court observed, 

but Congress “show[ed] no intent to preclude reconsideration, either judicial or administrative, 

after notice and hearing.”18 The Department here afforded Delta everything to which it was 

entitled under the “security of route” principle recognized in CAB v. Delta: Delta received both

formal notice (Order 2014-12-9) and a hearing (the evidentiary processes involved). Delta’s 

reference to CAB v. Delta thus actually supports the propriety of the Department’s procedures 

and actions in this proceeding. 

 

18 See CAB v. Delta, 367 U.S. at 328 n.11.
9

AMERICAN’S REPLY TO HAWAIIAN’S OBJECTIONS

I. Hawaiian Ignores the Department’s Thoughtful Rationale for Granting Backup 

Authority to American.

Hawaiian opposes the Department’s tentative decision to designate American as the 

backup carrier to serve Los Angeles-Haneda should Delta fail to comply with the conditions and 

requirements in the Order. Hawaiian gives little justification for its objection, even though the 

Department explained in great detail why American’s Los Angeles-Haneda service “offers a 

number of benefits that warrant its tentative selection over Hawaiian’s Kona-Haneda proposal.”19

A. Hawaiian Was Not Selected as a Backup Carrier Because Its Proposal Does 

Not Enhance Competition.

The Department tentatively awarded American backup authority because it provides 

robust competition benefiting U.S. consumers. American’s Haneda proposal, the Order 

observes, will “provide service in the largest U.S.-Tokyo O&D market in this proceeding, and 

would enhance competition in the Los Angeles market.”20

As the Department recognizes, Hawaiian’s Kona-Haneda service proposal does not 

provide similar competitive benefits. Hawaiian already enjoys Honolulu-Haneda service, and no 

other U.S. carrier provides Haneda service in Hawaii. As the Department noted, the State of 

Hawaii already enjoys three of the eight total U.S.-Haneda slot pairs, and granting a fourth slot 

pair for Kona-Haneda service would not maximize the public benefit.21 

 

19 See Order to Show Cause, p. 9.

20 Id. American’s Los Angeles-Haneda proposal also enhances intra-gateway and intraalliance competition at Los Angeles. See Application of American, p. 3. 

21 See Order to Show Cause, p. 7.
10

B. Hawaiian’s Service Proposal Would Benefit Japanese Leisure Travelers 

Rather Than U.S. Consumers.

Hawaiian’s objections distort the Department’s efforts to maximize the public benefits of 

the Haneda slot pair for all U.S. consumers. Hawaiian complains that the Department was 

focused only on U.S. business travelers, but the Department did not prioritize the interests of 

U.S. business travelers to the exclusion of leisure travelers. The Department instead determined 

the two groups’ interests to be aligned. Specifically, DOT rejected Hawaiian’s Kona-Haneda 

proposal because it would “minimize Haneda’s advantages to U.S. travelers in general, and U.S. 

business travelers in particular.

22

 By contrast, the Department noted that Hawaiian’s KonaHaneda proposal would primarily benefit Japanese-originating leisure traffic to Hawaii.23

 

Hawaiian cannot expect the Department to award backup authority of the valuable 

Haneda slot pair to a route that would primarily benefit Japanese tourists over a proposal that 

would inure to the benefit of all U.S. consumers. 

C. Hawaiian Cannot Meet the 60-Day Start-Up Commitment That Is Necessary 

to Provide Continuity of Service Should Delta Violate the Conditions and 

Requirements Tentatively Imposed.

American’s commitment to start Los Angeles-Haneda service within 60 days was another 

important reason why the Department’s choice of American as backup slot authority holder was 

reasonable. Indeed, American’s commitment to quickly begin service should it assume Delta’s 

slot authority “[took] on additional weight in the context of tentatively awarding backup 

authority” because it assured DOT of the continuity of service necessary to maximize the public 

benefits of the valuable Haneda slot pair.24

 

22 Id., p. 10 (emphasis added). 

23 Id.

24 Id, p. 9.
11

Hawaiian cannot make the same commitment because Kona does not have an operable 

U.S. Customs and Border Protection (CBP) Federal Inspection Services (FIS) facility.25 

Hawaiian again fails to address this key flaw of its Kona-Haneda proposal. 

II. Hawaiian’s Claim That the Department Failed to Comply with the APA Is an 

Attempt to Hide the Inferiority of Its Proposed Kona-Haneda Service.

Hawaiian argues that the Department fails to comply with the APA because “the Show 

Cause Order fails to adequately explain its decision.”26 But, in its Order, the Department 

explained in detail why Hawaiian was neither awarded the slot pair, nor selected as a backup 

carrier. Among the many reasons for rejecting Hawaiian’s proposal contained in the Order, DOT 

observed that the State of Hawaii already “enjoys three of the eight U.S.-Haneda routeopportunities available,” that Kona-Haneda service would “minimiz[e] Haneda’s advantages to 

U.S. travelers,” and that American had an ability to “start service promptly.”27 After failing to 

convince the Department of the merits of its Kona-Haneda service, Hawaiian must accept that its 

proposal cannot meet the competitive or consumer benefits associated with the valuable Haneda 

slot pair.

 

25 Jason Ubay, Opening Hawaii’s Kona Airport for International Flights Has Benefits, but 

Obstacles Remain, Pacific Business News (January 7, 2015), available at 

http://www.bizjournals.com/pacific/news/2015/01/07/opening-hawaiis-kona-airport-forinternational.html?page=all; Ex. AA-SR-102. Nancy Cook Lauer, County Seeks International 

Flights to Kona, W. Hawaii Today (Jan. 28, 2014), available at 

http://westhawaiitoday.com/news/local-news/county-seeks-international-flights-kona.

26 Objection of Hawaiian, April 6, 2015, Docket DOT-OST-2010-0018, p. 9.

27 Order to Show Cause, pp. 7, 9.
12

CONCLUSION

For the reasons set forth above, American Airlines, Inc. respectfully submits that the 

Department should make final its tentative decision in Order 2015-3-17 in its entirety and 

unchanged. Should Delta not accept the conditions and safeguards imposed on Delta as a 

condition to utilizing that Seattle-Haneda slot pair authority, the Department should reallocate 

that slot pair to American.

 

Respectfully submitted,

Howard Kass

Robert A. Wirick

Abigail Donovan
CERTIFICATE OF SERVICE

I, Abigail Donovan, certify that, on April 13, 2015, I caused to be served a copy of the 

foregoing Reply of American Airlines, Inc. to Objections to Order 2015-3-17 by email upon 

those addressees listed below:

paul.gretch@dot.gov (DOT)

brian.hedberg@dot.gov (DOT)

brett.kruger@dot.gov (DOT)

todd.homan@dot.gov (DOT)

peter.irvine@dot.gov (DOT)

englets@state.gov (Dep’t of State)

cristinasa@state.gov (Dep’t of State)

eugene.alford@ita.doc.gov (Dep’t of Commerce)

ejames@jamhoff.com (Allied Pilots Association)

seth.waxman@wilmerhale.com (Delta)

sascha.vanderbellen@delta.com (Delta)

chris.walker@delta.com (Delta)

Mike.Donatelli@alpa.org (Delta MEC/ALPA)

john.s.duncan@faa.gov (FAA)

jhill@cooley.com (Hawaiian)

perkmann@cooley.com (Hawaiian)

Robert.Lamansky@hawaiianair.com (Hawaiian)

glindsey@lawa.org (Los Angeles World Airports)

ishiwata.k@portseattle.org (Port of Seattle)

safora.i@portseattle.org (Port of Seattle)

dan.weiss@united.com (United)

steve.morrissey@united.com (United)

gmurphy@crowell.com (United)

sseiden@crowell.com (United)

info@airlineinfo.com (AirlineInfo.com)

_________________________________

Abigail Donovan